Obama’s grand climate plan doesn’t add up

President Obama yesterday gave the most important speech on climate change in his tenure so far. In the words of Al Gore, it was the best “by any president ever”. It is a different matter that all the big cable news operators in the US chose to ignore this speech.

Let’s see what the plan looks like. It takes up a host of issues—setting carbon emissions standards for power plants (which will reduce coal use), shift towards domestically produced natural (mostly shale) gas and oil in the near future, emphasis on renewable energy, fuel efficiency standards for heavier vehicles, funding for adaptation against extreme weather events in the US, end to US public financing for new coal plants overseas, launching negotiations towards achieving global free trade in environmental goods and services, including clean energy technology and working for an ambitious global deal in 2015.

Frankly, on its face value the plan indeed sounds ‘grand’. But dig deeper and you will find his plan doesn’t quite add up. Worse, this plan might end up jeopardising an “ambitious deal” that he so eloquently advocated for, in his speech.

Let me begin with coal and coal-based power plants. Obama’s big idea is to make coal-based power plants unviable in the US and stop and reduce coal use across the world. Though the intent is noble, it will backfire at the world stage. Let me explain.

With cheap shale gas, coal will become history in the US. It is a matter of time before companies start moving to gas-based power plants on their own. Obama’s new standard will hasten this transition. In fact, the US is likely to see huge reduction in energy prices because of this transition. But the same will not be viable in countries that import gas at a very high price. This will ensure US businesses out-compete manufacturers in other countries. How then would other countries respond to such a situation? They will certainly not move to the cleaner but more expensive renewable energy. They, too, will dig for gas and oil and coal—whatever is cheaper. And we have examples.

China has already started moving on shale gas. India’s shale gas policy is long awaited (in fact, India is now demanding import of cheap shale gas from the US). Russia and many European countries are moving to the Arctic for cheap oil and gas. The result of all this—we will see use of more fossil fuels, not less. It will also put to rest efforts to mainstream renewable energy. Renewable energy will remain marginal. With increasing global population and economic prosperity, and a gas and oil future (even if we get rid of all coal, however unreal it may sound), we should ready ourselves for real scorching heat.

Now coming to technological innovation, I am especially wary about Obama’s call for “launching of negotiations toward global free trade in environmental goods and services, including clean energy technology”. Instead of supporting transition in developing countries, this might actually lead to trade wars on clean energy technologies. The fact is solar energy trade wars have already started in the US, China and the EU. India’s solar manufacturing has greatly suffered because of dumping from China and cheap loans (and mandatory purchasing) from the US. We don’t need free trade that is going to stymie development of clean technologies in different countries. We need a global cooperative model that fosters innovation for clean energy development.

Speaking on leading by example the President categorically said that when the US phased out chlorofluorocarbons (CFCs) to protect the ozone layer, “it didn’t kill off refrigerators or air-conditioners or deodorant”. He lauded American businesses to figure out replacement technologies “without harming the environment as much”. But today, the same replacement technologies, first hydrochlorofluorocarbons (HCFCs) and now hydrofluorocarbons (HFCs), has led him to join hands with China to jointly phase down production and consumption of the “dangerous hydrofluorocarbons”. To Obama of course, this deal with China is an example of strengthening ties with emerging economies. He clearly does not see this as the failure of American industry to produce chemicals that may not deplete the ozone layer but are extremely harmful greenhouse gases.

And finally on his vision for a global deal, Obama said: “What we need is an agreement that’s ambitious—because that’s what the scale of the challenge demands. We need an inclusive agreement—because every country has to play its part. And we need an agreement that’s flexible—because different nations have different needs”. Other than the ambition part, this has been the US’s position since the Rio conference in1992. It is a bottom-up, pledge and review model that the US has been advocating for far too long now. This model doesn’t take into account the demand of science or the imperatives of justice and equity. This obtuse position of the US is the primary reason we have all failed at the United Nations Framework Convention on Climate Change (UNFCCC). The fact is Mr President is still talking about the US reducing its emissions by 17 per cent from 2005 levels by 2020 (or about 3 per cent reductions over the 1990 levels).

This is not leadership. This position is not going to define a sustainable future for this generation or the next, let alone deliver on the lofty goal of averting the climate crisis.